SaaSquatch Capital Corp. Announces Letter of Intent for Qualifying Transaction with Jasper Interactive Studios Inc. and Proposed Concurrent Financing

TSX-V: SAAS.P

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VANCOUVER, BC, Sept. 16, 2021 /CNW/ - SaaSquatch Capital Corp. (TSXV: SAAS.P) ("SaaSquatch" or the "Company"), a capital pool company listed on the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has entered into a binding letter of intent dated September 16, 2021 (the "Letter of Intent") with Jasper Interactive Studios Inc. ("Jasper") in respect of a proposed business combination (the "Proposed Transaction"). It is anticipated that the Proposed Transaction will constitute the Company's "Qualifying Transaction" in accordance with Policy 2.4 – Capital Pool Companies of the Exchange.

About Jasper

Jasper is a private company incorporated under the laws of Ontario, and currently has 1,940,681 common shares (the "Jasper Shares") issued and outstanding, as well as 180,000 options to acquire up to 180,000 Jasper Shares at exercise prices ranging from $3.00 per share to $7.00 per share, and 316,887 warrants to acquire up to 316,887 Jasper Shares at exercise prices ranging from $2.60 per share to $7.50 per share. In addition, Jasper has outstanding convertible debentures in the aggregate principal amount of $3,483,000 (the "Jasper Debentures"). Jasper's head office is based in Ontario.

Jasper offers a Product Information Management ("PIM") solution that has the objective of empowering eCommerce merchants to manage and merchandise their products from a single source of truth, facilitating them to sell more, sell faster and work smarter. Jasper's PIM is accessible from anywhere via a web-browser and is intended to simplify the process by which online merchants import product data into the PIM. Once uploaded, merchants can add various product data including product attributes, images, videos, marketing information, inventory quantities and price books and efficiently merchandise their products using various features that include, among other things, the ability to adjust product categorization, pricing data and other key metrics. Jasper's PIM also allows for automatic syncing to popular eCommerce storefronts, marketplaces, or other connected channels, whenever new products are added to the PIM.

Jasper was founded by Jon Marsella in 2010 as a boutique eCommerce systems integrator and custom software developer. The insight garnered from working directly with innovative online merchandisers allowed Jasper to understand the emerging needs in the industry and helped guide its development and productization of its PIM, putting Jasper at the forefront of this new category of software in the eCommerce technology stack. Jasper's broad-based knowledge and strong partner relationships help position it to better deliver on the real end to end business needs required to succeed in the eCommerce world. In 2017, Jasper evolved its solution to Software-as-a-Service (SaaS) which is now being used by some of the world's most preeminent brands. Over the last couple of years Jasper has achieved comprehensive distribution through leading eCommerce marketplaces such as Shopify, BigCommerce, and Magento (an Adobe company) where Jasper offers an innovative tiered solution that scales from small and medium businesses to large Enterprises.

Jasper PIM is thus well-positioned to serve both smaller customers who require quality merchandising solutions to expand their online business operations and larger Enterprises who want to be more competitive in the area of eCommerce.

Today, Jasper is an award winning, SaaS solution that provides valuable PIM services to businesses all over the world. Jasper helps a myriad of retailers manage and merchandise their product information so that they can unify their eCommerce technology stack and optimize the way they sell and market their products or services into new channels around the world.

Summary of Financial Information of Jasper

The following table presents selected financial statement information on the financial condition and results of operations for Jasper. Such information is derived from the unaudited financial statements of Jasper for the years ended July 31, 2021 and 2020. The information provided herein should be read in conjunction with Jasper's financial statements, which will be contained in the filing statement to be filed on SEDAR in connection with the Proposed Transaction.

	As at and for the period ended July 31, 2021	As at and for the period ended July 31, 2020
Revenue	$1,365,257	$1,508,257
Expenses	$(2,572,941)	$(2,704,165)
Net Income (Loss)	($1,207,684)	($1,195,908)
Current Assets	$1,700,234	$258,686
Other Assets	$15,133	$18,518
Total Assets	$1,715,367	$277,204
Current Liabilities	$809,117	$717,657
Other Liabilities	$3,912,849	$1,374,087
Total Liabilities	$4,721,966	$2,091,744
Total Shareholders' Equity (Deficiency)	$(3,006,599)	$(1,814,540)
Total Liabilities and Equity	$1,715,367	$277,204

Summary of the Proposed Transaction

The Letter of Intent contemplates that SaaSquatch and Jasper will negotiate and enter into a definitive agreement in respect of the Proposed Transaction on or before September 30, 2021 (the "Definitive Agreement"), pursuant to which it is anticipated that SaaSquatch will acquire all of the issued and outstanding Jasper Shares. The shareholders of Jasper will receive post-Consolidation (as defined below) SaaSquatch common shares (the "SaaSquatch Shares") in exchange for their Jasper Shares, resulting in a reverse takeover of SaaSquatch by Jasper. The Proposed Transaction will be structured as a three-cornered amalgamation, plan of arrangement or other structure based on the advice of the parties' respective advisors and taking into account various securities, tax, operating and other considerations.

Prior to the closing of the Proposed Transaction, SaaSquatch will consolidate its outstanding SaaSquatch Shares on the basis of one (1) new SaaSquatch Share for each two (2) old SaaSquatch Shares (the "Consolidation"), such that, prior to closing of the Proposed Transaction, SaaSquatch will have 6,500,000 post-Consolidation SaaSquatch Shares issued and outstanding. It is intended that post-Consolidation SaaSquatch Shares will be issued to holders of Jasper Shares on the basis of 13.94835 post-Consolidation SaaSquatch Shares for each one (1) Jasper Share (the "Exchange Ratio"), resulting in the issuance of an aggregate of approximately 27,069,297 post-Consolidation SaaSquatch Shares to the shareholders of Jasper. Jasper options and warrants will become exercisable for post-Consolidation SaaSquatch Shares, with the number and exercise price adjusted to reflect the Exchange Ratio, in accordance with the terms of such options and warrants, as applicable.

Upon closing of the Proposed Transaction, the principal amount of the Jasper Debentures will be settled by issuing to the holders of Jasper Debentures an aggregate of approximately 9,386,249 post-Consolidation SaaSquatch Shares at a deemed price of $0.375 per post-Consolidation SaaSquatch Share and an aggregate of approximately 2,331,937 warrants to purchase approximately 2,331,937 post-Consolidation SaaSquatch Shares at an exercise price of $0.5625 per post-Consolidation SaaSquatch Share. In addition, in connection with the conversion of the Jasper Debentures, SaaSquatch will assume the existing obligations of Jasper to certain brokers that assisted in the Jasper Debentures financing, and will issue broker warrants to such brokers as follows: (i) in the case of one tranche of the Jasper Debentures financing, Saasquatch will issue broker warrants exercisable to acquire 27 units at an exercise price of $1,000 per unit, such units consisting of, in the aggregate, 72,000 post-Consolidation SaaSquatch Shares and warrants to purchase up to 18,077 post-Consolidation SaaSquatch Shares at an exercise price of $0.5625 per post-Consolidation SaaSquatch Share, and (ii) in the case of another tranche of the Jasper Debentures financing, Saasquatch will issue broker warrants exercisable for, in the aggregate, approximately 423,466 post-Consolidation SaaSquatch Shares at an exercise price of $0.375 per post-Consolidation SaaSquatch Share. Any accrued interest remaining on the Jasper Debentures on the closing date of the Proposed Transaction will be repaid in post-Consolidation SaaSquatch Shares on the basis of $0.375 per post-Consolidation SaaSquatch Share (or may be paid partly or wholly in cash at the election of Jasper).

In addition, a finder's fee of approximately 1,386,952 post-Consolidation SaaSquatch Shares will be payable by SaaSquatch to an arm's length third party (the "Finder") in connection with the closing of the Proposed Transaction. The Finder was responsible for co-ordinating the introduction of principals of the Company with principals of Jasper and otherwise facilitated the negotiation and structuring of the Proposed Transaction. It is anticipated the Finder will continue to provide assistance and support in respect of the Proposed Transaction until closing.

It is anticipated that the resulting entity (the "Resulting Issuer") will continue the business of Jasper under a name to be determined by Jasper (the "Name Change").

The following table sets out the expected share capital of the Resulting Issuer on a non-diluted basis after giving effect to the Proposed Transaction (but excluding any securities to be issued pursuant to the Concurrent Financing, as described below):

Category of Security^(1)	Number^(1)	Percentage^(1)
SaaSquatch Shares held by SaaSquatch shareholders	6,500,000	14.7%
SaaSquatch Shares issued to Jasper former shareholders^(2)	27,069,257	61.0%
SaaSquatch Shares issued to former holders of Jasper Debentures	9,386,249	21.2%
SaaSquatch Shares issued to the Finder	1,386,952	3.1%
TOTAL:	44,342,458	100%

Notes:

1. Calculated on a post-Consolidation basis.
2. Assumes there are no dissenting Jasper shareholders.

The post-Consolidation SaaSquatch Shares to be issued pursuant to the Proposed Transaction will be issued pursuant to exemptions from the prospectus requirements of applicable securities legislation. Certain common shares of the Resulting Issuer to be issued pursuant to the Proposed Transaction are expected to be subject to restrictions on resale or escrow under the policies of the Exchange, including the securities to be issued to "Principals" (as defined under Exchange policies), which will be subject to the escrow requirements of the Exchange.

The completion of the Proposed Transaction remains subject to a number of terms and conditions, including, among other things:

• the negotiation and execution of the Definitive Agreement;
  
  
• completion of the Consolidation;
  
  
• completion of the Name Change;
  
  
• completion of the Concurrent Financing for minimum gross proceeds of $3 million, described below;
  
  
• the parties obtaining all necessary consents, orders and regulatory and shareholder approvals, including the conditional approval of the Exchange subject only to customary conditions of closing;
  
  
• if required by the Exchange, the delivery of a sponsor report and independent valuation satisfactory to the Exchange;
  
  
• no material adverse changes occurring in respect of either SaaSquatch or Jasper;
  
  
• completion of a thorough business, legal and financial review by each of the parties of the other parties;
  
  
• the resignation of the directors and officers of the Company except for Mr. Garrison and the appointment of such directors and officers as may be determined by Jasper; and
  
  
• other standard conditions of closing for a transaction in the nature of the Proposed Transaction.

There can be no assurance that all of the necessary regulatory and shareholder approvals will be obtained.

Upon completion of the Proposed Transaction, it is anticipated that the Resulting Issuer will be listed as a Tier 2 Technology Issuer on the Exchange, with Jasper as its primary operating subsidiary.

Concurrent Financing

In connection with the Proposed Transaction, Jasper has engaged Echelon Wealth Partners Inc. (the "Agent") to act as lead agent and sole bookrunner (on its own behalf and on behalf of a syndicate of agents which may be formed)  in connection with a best efforts private placement offering (the "Concurrent Financing") of a minimum of 6,000,000 subscription receipts (the "Subscription Receipts") and a maximum of 8,000,000 subscription receipts (or such other amount as Jasper and Echelon may agree) at a price of $0.50 per subscription receipt to raise gross proceeds of up to $4 million, which will be held in escrow by a subscription receipt agent. Upon satisfaction of the escrow release conditions, which includes satisfaction of all conditions precedent of the Proposed Transaction, each Subscription Receipt will convert, without payment of any additional consideration and without further action on the part of the holder thereof, into Jasper Shares and Jasper warrants which will then be exchanged for post-Consolidation SaaSquatch Shares and warrants to purchase post-Consolidation SaaSquatch Shares, on the basis of one post-Consolidation SaaSquatch Share and one-half of one SaaSquatch warrant for each one Subscription Receipt. Each whole SaaSquatch warrant will be exercisable to purchase one post-Consolidation SaaSquatch Share at an exercise price of $0.70 per post-Consolidation SaaSquatch Share. The parties are expected to apply to list such SaaSquatch warrants on the Exchange.

Jasper will pay the Agent a cash commission equal to 8.0% of the gross proceeds of the Concurrent Financing (50% payable on the closing date of the Concurrent Financing and 50% payable upon the satisfaction of the escrow release conditions) and issue to the Agent compensation warrants (the "Compensation Warrants") equal to 8.0% of the number of Subscription Receipts sold pursuant to the Concurrent Financing, issuable on the closing date, with each Compensation Warrant exercisable to acquire Jasper Shares. Provided the escrow release conditions are satisfied, pursuant to the Proposed Transaction, each Compensation Warrant will be exchanged for one compensation warrant of the Resulting Issuer upon the satisfaction of the escrow release conditions, which shall entitle the holder thereof to subscribe for post-Consolidation SaaSquatch Shares at a price of $0.50 per Jasper Share and otherwise on terms updated to reflect the Exchange Ratio. Jasper will also reimburse the Agent for all reasonable expenses and fees incurred with respect to the Concurrent Financing.

The Subscription Receipts will be subject to registration and prospectus requirements and will be subject to resale restrictions under applicable securities legislation and the national instruments promulgated thereunder. The Subscription Receipts will not be transferable under the laws of Canada, except pursuant to applicable statutory exemptions, until the date that is four months and a day after the date Jasper becomes a reporting issuer in any province or territory of Canada. The post-Consolidation SaaSquatch Shares and warrants to purchase post-Consolidation SaaSquatch Shares issuable upon the exchange of the Subscription Receipts will be freely tradeable for Canadian holders pursuant to applicable Canadian securities laws.

The net proceeds of the Concurrent Financing will primarily be used to fund the Proposed Transaction costs, for sales and marketing purposes and to meet working capital requirements of the Resulting Issuer.

Summary of Proposed Directors and Officers of the Resulting Issuer

It is intended that concurrent with the closing of the Proposed Transaction, the board of directors and management of the Company will be reconstituted. The first directors of the Resulting Issuer are expected to be Jon Marsella, Silas Garrison, Gerry Hurlow, Mag Saad and Jeffrey Klam and such other directors as determined by Jasper. These directors shall hold office until the first annual meeting of the shareholders of the Resulting Issuer following closing, or until their successors are duly appointed or elected. The first officers of the Resulting Issuer will be Jon Marsella as CEO, Mike Hodes as CFO and Corporate Secretary and Sean Coutts as Chief Operating Officer & Chief Technology Officer, and such other officers as determined by Jasper. 

Additional biographic information about the proposed directors and officers of the Resulting Issuer is provided below.

Jon Marsella – Chief Executive Officer and Director

Jon C. Marsella has been developing innovative software solutions for over 20 years. Throughout 2000-2010, Jon worked for several interactive agencies in a variety of capacities, including Chief Technology Officer, Director of Internet Technology, researcher, software prototype engineer, solution architect, 3D game programmer, and account manager. Jon largely worked on special projects for media/entertainment properties such as Discovery Channel, Sesame Street, CTV, Glassbox Television, Warner Music and Warner Home Video. In 2010, Jon worked with the Canadian Space Agency developing a 3D neurocognitive research simulation for astronaut training. Jon founded Jasper with the intent of bringing the absolute best SaaS PIM solution to market for eCommerce merchants.

Mike Hodes – Chief Financial Officer and Corporate Secretary

Mike Hodes has 25 years of senior financial management experience in the technology sector including 15 years as a CFO. A trusted adviser to six entrepreneurial CEOs to date in growing start-up companies. He has extensive cross-border and overseas experience having set up and managed the accounting, finance, legal, HR, tax, property and other related back-office functions for companies in the U.S., U.K. and France. Prior to joining Jasper in 2018, Mike was the CFO of Casewise, a company partially backed by a New York based venture capital investor, that sold a business process modelling tool to Fortune 500 companies. Mike is a qualified FCA (England and Wales) and CPA, CA (Canada) and has a Bachelor of Arts degree from the London Metropolitan University.

Sean Coutts – Chief Operating Officer and Chief Technology Officer

Sean has 23 years of experience helping global companies become market leaders through exceptional technical strategy and execution.  The organizations Sean has worked with have combined for over a billion dollars in growth both organically and through acquisitions.  Sean was COO of Kit Digital a global DAMS provider for Media and Advertising, and was COO of SendtoNews, a global Sports Video provider where he worked with the largest sports entities (NFL, NBA, Nascar, PGA, among others) and many tier 1 publishers. In addition to working at several private start-ups and public companies with a rapid growth and global footprint, Sean was GM for Walmart Canada where he developed their eCommerce strategy and business plan.

Silas Garrison – Director

Silas Garrison is a seasoned business leader and tech entrepreneur. Silas currently serves as HealthSpace Data Systems Ltd.'s ("HealthSpace") Chief Executive Officer and previously served as HealthSpace's Chief Technology Officer. Prior to joining HealthSpace, Silas co-founded iGov Data Solutions, a mobile solutions provider. Silas and his partners sold iGov's product IP and assets to HealthSpace. Silas has a vast amount experience in various business verticals having consulted and worked with a variety of enterprise organizations, ranging from Fortune 500 banks to sports and media conglomerates.

Gerry Hurlow – Director

Gerry Hurlow has been President of Toronto based Meteor Capital Inc. since 2009.  Meteor invests in private and public growth companies with a focus on Canadian emerging technology businesses. Prior to founding Meteor Capital, Gerry was the managing partner of HSD Partners Inc., similarly an investor in public growth companies. Gerry has significant experience with Canadian public company boards, including as the lead director for MKS Inc. Gerry has a Bachelor of Applied Science, Chemical Engineering degree from the University of Waterloo.

Mag Saad – Director

Mag Saad is an independent Executive Management Consultant, with a long successful career providing coaching and consulting services to executives of multimillion and multibillion -dollar international corporations. Mag has an impressive track record helping organizations optimize their corporate resources and scale their operations and governance structures. He has held various executive positions such as: President, CEO, COO, VP Operations, AVP Delivery and Portfolio Management among others, in diverse industries including Hi-Tech, Telecom, Utilities, Banking, Retail, Professional Services, eCommerce, Insurance, Logistics and Government.

Jeffrey Klam – Director

Jeffrey Klam is an experienced corporate and securities law practitioner with law firm, regulatory, and in-house experience. As a lawyer practicing in association with Caravel Law Professional Corporation, he focuses his practice on corporation transactions, primarily financing and mergers and acquisitions transactions. After starting his career with a large national Canadian law firm, Jeffrey worked as legal counsel in the Corporate Finance Branch of the Ontario Securities Commission and as General Counsel and Corporate Secretary for a TSX and ASX listed gold mining company before joining Caravel Law to practice in association in 2014.

No insiders of the Resulting Issuer are expected other than the board and management.

Sponsorship of a Qualifying Transaction

Sponsorship of a qualifying transaction is required by the Exchange unless exempt or waived in accordance with Exchange policies. The Company intends to apply for a waiver from the sponsorship requirements pursuant to the policies of the Exchange, however, there is no assurance that a waiver will be provided. Additional information on sponsorship arrangements will be provided once available.

Other Information relating to the Proposed Transaction

The Proposed Transaction will not constitute a "Non-Arm's Length Qualifying Transaction" (as such term is defined in the policies of the Exchange) for SaaSquatch. Accordingly, the Proposed Transaction will not require the approval of the shareholders of SaaSquatch.

The Proposed Transaction will require the approval of the shareholders of Jasper. Jasper intends to hold a shareholder meeting to seek all necessary approvals.

In accordance with the policies of the Exchange, the SaaSquatch Shares are currently halted from trading and will remain so until such time as required by Exchange policies.

In connection with the Proposed Transaction and the Concurrent Financing, McMillan LLP is acting as legal counsel to SaaSquatch, Caravel Law Professional Corporation is acting as legal counsel to Jasper and Wildeboer Dellelce LLP is acting as legal counsel to the Agent.

Additional information concerning the Proposed Transaction, SaaSquatch, Jasper and the Resulting Issuer will be provided in a subsequent news release and in the Filing Statement to be filed by SaaSquatch in connection with the Proposed Transaction and which will be available under SaaSquatch's SEDAR profile at www.sedar.com.

About SaaSquatch Capital Corp.

SaaSquatch is designated as a Capital Pool Company under Exchange Policy 2.4. SaaSquatch has not commenced commercial operations and has no assets other than cash. The Company's objective is to identify and evaluate businesses or assets with a view to completing a Qualifying Transaction. Any proposed Qualifying Transaction must be approved by the Exchange and, in the case of a Non-Arm's Length Qualifying Transaction, must also receive majority approval of the minority shareholders. Until the completion of a Qualifying Transaction, the Company will not carry on any business other than the identification and evaluation of businesses or assets with a view to completing a proposed Qualifying Transaction.

As of the date hereof, the Company has 13,000,000 Shares issued and outstanding (2,000,000 of which are subject to escrow restrictions) and an aggregate of 200,000 Shares are reserved for issuance upon the exercise of agent's options.

ON BEHALF OF THE BOARD OF DIRECTORS OF SAASQUATCH CAPITAL CORP.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

All information contained in this news release with respect to SaaSquatch, Jasper and the Resulting Issuer was supplied by the parties, respectively, for inclusion herein, and SaaSquatch and its directors and officers have relied on Jasper for any information concerning such party.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements, including statements relating to the completion of the Proposed Transaction, the execution of the Definitive Agreement, the proposed business of the Resulting Issuer, the completion of the Concurrent Financing, the proposed directors and officers of the Resulting Issuer, the completion of the Consolidation, the completion of the Name Change, Exchange sponsorship requirements and intended application for waiver therefrom, shareholder, director and regulatory approvals, and future press releases and disclosure. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance of each of SaaSquatch and Jasper may differ materially from those anticipated and indicated by these forward looking statements. Although each of SaaSquatch and Jasper believes that the expectations reflected in forward looking statements herein are reasonable, they can give no assurances that the expectations of any forward looking statements herein will prove to be correct. Except as required by law, each of SaaSquatch and Jasper disclaims any intention and assume no obligation to update or revise any forward looking statements herein to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

SOURCE SaaSquatch Capital Corp.

Warwick Smith, CEO, [phone]